NOTICE OF REGULAR MEETING · NOTICE OF REGULAR MEETING PLEASE TAKE NOTICE that there will be a regular meeting of the Commission of the Madison Metropolitan Sewerage District at 8:00

NOTICE OF REGULAR MEETING

PLEASE TAKE NOTICE that there will be a regular meeting of the Commission of the Madison Metropolitan Sewerage District at 8:00 a.m., on Thursday, February 13, 2014 in the Commission Room of the Operations Building at 1610 Moorland Road, Madison, Wisconsin 53713. The Commission will consider and may take action on the matters set forth on the attached Agenda. If any matter on the Agenda is to be considered in closed session of the Commission, please be advised that following the closed session the Commission will reconvene into open session for purposes of concluding its Agenda. Date: February 11, 2014 D. Michael Mucha, P.E. Chief Engineer and Director Any person who has a qualifying disability as defined by the Americans with Disabilities Act that requires the meeting or materials at the meeting to be in an accessible location or format must contact the Director at 608-222-1201, 1610 Moorland Road, Madison, Wisconsin, at least twenty-four hours prior to the commencement of the meeting so that any necessary arrangements can be made to accommodate each request. 1. Opening (8:00-8:03 AM)

Call to Order Welcome guests and visitors Announcements

2. Appearances by the Public (8:03-8:04 AM) 3. Consent Calendar (8:04-8:06 AM)

A. Approval of Commission Meeting Minutes from 01-30-14 B. Approval of Cash Statement-Operating Fund C. Approval of Cash Statement-Capital Projects Fund

4. Authorizing the Purchase of Chemicals (8:06-8:16 AM) Nehm Click Here: Commission Agenda Report

5. Authorizing Overhaul of Gas Engine (8:16-8:26 AM) Nehm Click Here: Commission Agenda Report

6. Review and Adoption of Resolution Authorizing The Issuance and Sale of Brochtrup

Up to $12,362,184 General Obligation Sewerage System Promissory Notes, Series 2014A and Providing for Other Details With Respect Thereto for the Pump Station 18 Force Main Project (8:26-8:33 AM) Click Here: Commission Agenda Report

Click Here: Attachment 7. Oral Reports and Updates (8:33-8:42 AM) Staff

A. CARPC Update-Commission and Staff B. Capital Project Update-Simon C. Chief Engineer & Directors Report-Mucha

Meeting Schedule as of 2/10/13

8. Future Agenda Topics (8:42-8:43 AM) 9. Other Business by Law (8:43-8:44 AM) 10. Adjournment (8:44-8:45 AM)

Meeting of the Commissioners of the Madison Metropolitan Sewerage District Thursday, January 30, 2014 8:00 a.m. MMSD Commission Board Room, 1610 Moorland Road, Madison, WI 53713 Present: Commissioner Tom Hovel Commissioner Caryl Terrell (via teleconference) Commissioner Ezra Meyer Commissioner Topf Wells Commissioner John Hendrick

Commission Meeting Call to order: Commissioner Hovel called the meeting to order at 8:01 a.m. 1. Opening A. Welcome Guests

Mike Dailey, City of Madison; Rebecca Harring, Wells Fargo and Melissa Malott, Dane County.

B. Announcements None.

2. Appearances by the Public None. 3. Consent Calendar Discussion: The Commission Meeting Minutes of January 16, 2014. Action: Commissioner Wells moved, seconded by Commissioner Meyer that the

Commission approve the Consent Calendar. Motion carried unanimously. 4. Review and Approval of Sewer Extension Plan Presenter: Curt Sauser, Engineering Technician Description: The following sewer extension plans were reviewed and placed on file:

• East Johnson Street Reconstruction-2014, City of Madison

Commission Meeting Minutes January 30, 2014 Page 2

• King St., East Main St., & South Pinckney St., Assessment District-2014, City of Madison

Action: Commissioner Wells moved, seconded by Commissioner Meyer that the following resolutions be adopted:

Attachment: 2014-01-30-R1 East Johnson Street Reconstruction-2014, City of Madison Attachment: 2014-01-30-R1 King St., East Main St., & South Pinckney St., Assessment District-2014, City of Madison

Motion carried unanimously.

5. 2013 Boundary Annexations Presenter: Curt Sauser, Engineering Technician Description: Presentation of maps and total boundary added to the District through

annexations in the year 2013. Discussion: Mr. Sauser informed the Commission that during the year 2013, a total of 168.21 acres were added to the MMSD service area boundary. The total MMSD service area is approximately 182.4 square miles.

Action: None. 6. Expedited Annexation Procedure

Presenter: Michael Mucha, Chief Engineer & Director Description: Approval of an expedited annexation procedure applicable to cities and villages within the original district. Discussion: Mr. Mucha shared the proposed workflow and key considerations to implementing an expedited annexation procedure. The proposed new process will require the City of Madison and the City of Middleton to provide official notice and documentation in lieu of formal petition, to the District when they desire territory to be included within District boundaries. The territory may be annexed without objection as a consent item or by vote. The Commission may require the territory be annexed through the District’s standard annexation process, typically including a public hearing. Any costs associated with the new process will go into effect on or after January 1, 2015. Mike Dailey of the City of Madison Engineering Department requested that language be added referencing the approval of the Department of Natural Resources as a final authority, in addition to CARPC. Mr. Dailey also indicated that the City will meet early


with Mr. Mucha to discuss annexations to identify any issues that may need to be addressed prior to the City applying for CARPC approval. Action: After discussion, it was moved by Commissioner Wells and seconded by Commissioner Hendrick that the Commission endorse the new annexation process with further details of projected costs and an updated workflow to be presented at a future meeting.

7. STUDY SESSION: Phosphorus Management Strategy Presenter: Dave Taylor, Director of Ecosystems Services Description: Presentation of Yahara WINS Adaptive Management Report and facilitation of discussion. Discussion: Mr. Taylor led a study session on phosphorus management that was designed to inform and facilitate discussion with the Commission regarding key factors to consider when evaluating a potential transition to a full scale adaptive management project. President Terrell indicated that Commissioner Meyer and she will work closely with staff to assure issues are brought before the Commission in a timely manner. Commission comments/observations will be considered by staff as work on adaptive management moves forward. Action: None.

8. Oral Reports & Updates

A. Operations Report Presenter: Paul Nehm, Director of Operations and Maintenance.

Report/Update: Mr. Nehm presented treatment data for 2013. He noted that influent loadings to the treatment plant were slightly higher than in 2012. Effluent quality had remained excellent. Nehm showed that air usage per pound of BOD removed had decreased in 2013. He also discussed cold weather issues. The operators had done a good job of keeping ice off of the clarifier beaches to avoid tripping the sweep arms during the extremely cold nights. The problems that had been encountered with freezing on the new covers on the sludge storage tanks were discussed. Lastly, Nehm noted that the struvite recovery facility has been producing product for Ostara, but it has been difficult to control the size of the product. The District continues to work with Ostara to try to solve this problem. Action: None.


B. CARPC Update

Presenter: Commission. Report/Update: No report. Action: None.

C. Legislative Update Presenter: Attorney Paul Kent, District Counsel Report/Update: Attorney Kent facilitated a discussion regarding the amendment of current law to provide for variance to limits on the amount of phosphorus allowed in discharges to water bodies. The bill would authorize the use of adaptive management to comply with water quality standards for phosphorus and total suspended solids. Attorney Kent will monitor the progression of this legislation (Assembly Bill 680) and report back to the Commission. Action: None.

D. Chief Engineer & Directors Report Presenter: Michael Mucha, Chief Engineer & Director Report/Update: Mr. Mucha noted the District has chosen the 3rd, 4th or 5th of June as possible dates to host a ribbon-cutting ceremony in the spring of 2014 for the 11th Addition. Action: None.

9. Convene in Closed Session in Accordance with 19.85(1)(c) of the Wisconsin Statutes to Consider Employment, Promotion, Compensation or Performance Evaluation Data of any Public Employee Over Which the Governmental Body has Jurisdiction or Exercise Responsibility. Action: Commissioner Wells moved, seconded by Commissioner Hendrick to convene into closed session pursuant to section 19.85(1)(c) of the Wisconsin Statutes in order to consider employment, promotion, compensation or performance evaluation data of certain public employee(s). Commissioner Wells, Aye Commissioner Meyer, Aye Commissioner Hovel, Aye Commissioner Hendrick, Aye


Commissioner Terrell, Aye Nays: None. Motion carried unanimously. 10. Reconvene in Open Session Action: Commissioner Meyer moved, seconded by Commissioner Wells to reconvene in open session.

Commissioner Wells, Aye Commissioner Meyer, Aye Commissioner Hovel, Aye Commissioner Hendrick, Aye Commissioner Terrell, Aye Nays: None. Motion carried unanimously. 11. Discussion and Action, If Any, Related to Matters Discussed in Closed Session

Action: Commissioner Wells moved, seconded by Commissioner Meyer that the Commission adopt the 2014 goals for the Chief Engineer and Director as agreed upon in closed session.

Motion carried unanimously. 12. Future Agendas Action: None.

13. Other Business Allowed by Law

Action: None.

14. Adjournment Action: Commissioner Wells moved, seconded by Commissioner Meyer that the

Commission meeting be adjourned. Motion carried unanimously.


Regular Meeting of the Commissioners January 30, 2014 ______________________________________ Ezra J. Meyer, Secretary Future Meetings: Thursday, February 13, 2014 8:00 a.m. – Regular Commission Meeting Thursday, February 27, 2014 8:00 a.m. – Regular Commission Meeting and Study Session Thursday, March 13, 2014 8:00 a.m. – Regular Commission Meeting


RESOLUTION NO: 1

WHEREAS, plans for sanitary sewer extensions were submitted to the Madison Metropolitan Sewerage District (MMSD) for East Johnson Street Reconstruction - 2014, City of Madison, on January 22, 2014, by Mark Moder, City Engineering Division, and WHEREAS, the project consists of installing 5,836 feet of sanitary sewer on East Johnson Street, North Hamilton Street, North Hancock Street, North Blount Street, North Livingston Street, North Ingersoll Street, North Paterson Street, North Baldwin Street, North Butler Street and North Blair Street on the City’s Isthmus. The proposed sewer is being installed as part of the WI-DOT reconstruction project, and WHEREAS, a variance is being requested by the City of Madison from DNR Chapter NR 811.74(2) for some of the proposed sewers which will have less than the minimum 8 feet of horizontal separation from existing water main, and WHEREAS, the project proposes to install AWWA C900 DR18 sanitary sewer main where the required minimum horizontal separation from existing water main is not attained, and WHEREAS, the proposed sanitary sewer extension will connect to the City of Madison’s sewerage facilities and MMSD’s East Interceptor, and WHEREAS, no new areas are being served and no additional flows are anticipated, and WHEREAS, interceptor connection charges for the areas being served have been paid, and WHEREAS, the MMSD has received a sewer extension review letter #6-14-03 from the Capital Area Regional Planning Commission (CARPC) dated January 21, 2014 stating the CARPC staff has reviewed the proposed extension and determined that it is consistent with the urban service area provisions of the Dane County Water Quality Plan and the Dane County Land Use and Transportation Plan, and WHEREAS, the Chief Engineer and Director of MMSD has recommended the approval of said plans, THEREFORE, BE IT RESOLVED, that the plans for sanitary sewer extensions for East Johnson Street Reconstruction - 2014, City of Madison, submitted on January 22, by Mark Moder, City Engineering Division, be approved subject to the following conditions:

Attachment: 2014-01-16-R1


1. That the City of Madison shall require the presence of an engineer or an inspector on the construction of said sewer extensions who shall make a record showing in detail the construction as built and shall furnish the MMSD with as-built plans in the case of any significant deviations from the original design.

2. That the construction, operation, maintenance and use of said sewer extensions shall be in accordance with the lawful rules and regulations of the MMSD and with the applicable State of Wisconsin plumbing and sewerage codes.

3. That if construction of the sewer extensions covered by said plans has not commenced within four years following the approval date of this resolution, this approval shall become void and new plans shall be submitted. If construction has commenced but has not been completed within the four-year approval period, the unbuilt portion must be submitted for reapproval if it is a significant portion of the project and would require DNR approval.

The above resolution was adopted by the Commissioners of the Madison Metropolitan

Sewerage District at their meeting held in the District office on January 30, 2014.


RESOLUTION NO: 2

WHEREAS, plans for sanitary sewer extensions were submitted to the Madison Metropolitan Sewerage District (MMSD) for King St., E. Main St. & S. Pinckney Assessment District - 2014, City of Madison, on January 22, 2014, by Mark Moder, City Engineering Division, and WHEREAS, the project consists of installing 520 feet of 8-inch sanitary sewer on King Street and East Main Street on the City’s Isthmus. The proposed sewer is being installed in conjunction with a street reconstruction project, and WHEREAS, a variance is being requested by the City of Madison from DNR Chapter NR 811.74(2) for some of the proposed sewers which will have less than the minimum 8 feet of horizontal separation from existing water main, and WHEREAS, the project proposes to install AWWA C900 DR18 sanitary sewer main where the required minimum horizontal separation from existing water main is not attained, and WHEREAS, a variance is being requested by the City of Madison from DNR Chapter NR 110.13(3) for some of the proposed sewers where manhole spacing exceeds 400 feet, and WHEREAS, the Madison Sewer Utility is capable of cleaning sewers up to 700 feet in length, and believes their maintenance program can satisfactorily accommodate the these new sewer mains at the length proposed, and WHEREAS, the proposed sanitary sewer extension will connect to the City of Madison’s sewerage facilities and MMSD’s East Interceptor, and WHEREAS, no new areas are being served and no additional flows are anticipated, and WHEREAS, interceptor connection charges for the areas being served have been paid, and WHEREAS, the MMSD has received a sewer extension review letter #6-14-04 from the Capital Area Regional Planning Commission (CARPC) dated January 21, 2014 stating the CARPC staff has reviewed the proposed extension and determined that it is consistent with the urban service area provisions of the Dane County Water Quality Plan and the Dane County Land Use and Transportation Plan, and WHEREAS, the Chief Engineer and Director of MMSD has recommended the approval of said plans,

Attachment: 2014-01-30-R2


THEREFORE, BE IT RESOLVED, that the plans for sanitary sewer extensions for King St., E. Main St. & S. Pinckney Assessment District - 2014, City of Madison, submitted on January 22, by Mark Moder, City Engineering Division, be approved subject to the following conditions:

1. That the City of Madison shall require the presence of an engineer or an inspector on

the construction of said sewer extensions who shall make a record showing in detail the construction as built and shall furnish the MMSD with as-built plans in the case of any significant deviations from the original design.

2. That the construction, operation, maintenance and use of said sewer extensions shall be in accordance with the lawful rules and regulations of the MMSD and with the applicable State of Wisconsin plumbing and sewerage codes.

3. That if construction of the sewer extensions covered by said plans has not commenced within four years following the approval date of this resolution, this approval shall become void and new plans shall be submitted. If construction has commenced but has not been completed within the four-year approval period, the unbuilt portion must be submitted for reapproval if it is a significant portion of the project and would require DNR approval.

The above resolution was adopted by the Commissioners of the Madison Metropolitan

Sewerage District at their meeting held in the District office on January 30, 2014.

CREDIT CARD CHARGESBilling dates 12/03/2013-01/02/2014

DATE PO # VENDOR DESCRIPTION AMOUNT

12/18/2013 1301851 MRO Zone Time Management for Maintenance Professionals 47.37

12/17/2013 1301854 Priority Management 2014 calendar 19.83

12/30/2013 1301854 Experts Exchange IT Solutions online subscription 401.72

12/18/2013 1301854 OWAM Users Group 2014 OWAM Users Group conference registations 770.00

12/19/2013 1301854 Ticket Leap.com 2014 women's Leadership series seminars 159.00

12/16/2013 1301854 University of Wisconsin Surveyor's Institute registration fee January 22-24, 2013 240.00

12/11/2013 1301854 Milio's PCS meeting 82.98

12/6/2013 1301854 NewEgg.com Computer equipment/supplies 104.99





12/5/2013 1301854 City of Madison Downtown parking fee re meeting with Dane County 1.85

12/4/2013 1301854 Wells Fargo Annual Rewards membership fee 50.00

12/20/2013 1301885 Cell Phone Shop Services Carrying cases and car chargers 64.81

12/17/2013 1301890 Bill's Food Center Supervisory Academy attendees 15.92

12/26/2013 1301912 Red Cross Store First aid/CPR.AED supplies 44.77

11/12/2013 1301939 Verizon Wireless Cell phones billing 177.01

12/30/2013 1301955 Flex A Chart Mfg. Custom-printed 3' x 4' non-magnetic board 234.87

12/30/2013 1400047 Salisbury Industries Struvite Harvesting Building lockers 1,391.50

12/9/2013 1400125 Apex superstores Batteries for floor scrubber 339.15

1/2/2014 1300672 LinkedIn.com December mo. business subscription for recruiting 24.95

12/12/2013 1400172 Amazon.com Trailer cable and power strips 183.55

1/13/2014 1300853 Bruker Daltronics Destruction of Lab ECD detector 1,218.00

6,228.93$

COMMISSION AGENDA REPORT February 13, 2014

Authorizing the Purchase of Chemicals

Lead Staff: Paul Nehm, Director of Operations and Maintenance

Requested Action: Move to purchase chemicals for digester foaming control, sludge thickening, and struvite harvesting Attachments: None

Financial Impact: All of the items listed have been included in the 2014 budget. The total budgeted amount is $806,000.

Background: The new financial procedures adopted by the Commission in 2013 require that the Commission approve purchases in excess of $50,000. Throughout the year the District purchases chemicals in truckload sizes. These purchases are less than $50,000. However, a purchase order is normally created, approved, and issued at the beginning of the year for the total dollars budgeted for that specific chemical. These purchase orders have a value above $50,000. As truckload purchases are made during the year, they are charged against the purchase orders. The 2014 budget includes the following line items: Polymer for waste activated sludge thickening $ 56,000 Defoamant $ 50,000 Sodium hydroxide for struvite harvesting $300,000 Ferric chloride for hydrogen sulfide and struvite control $160,000 Polymer for digested sludge thickening $240,000 The District normally requests quotations for one year contracts with chemical suppliers with the option to extend the contract for two additional years if desired by

Authorizing Purchase of Chemicals Page 2 February 13, 2014

the District. At this time we do not have recent contracts for any of these chemicals for the following reasons: Polymers – It is a significant effort to test polymers. There are a number of polymer vendors. Each has a host of different polymers that they can supply. To determine which is best for the District, we invite polymer suppliers to first do jar tests with our sludge to help them to determine which of their polymers is most cost effective. Then those suppliers who wish to test must bring in enough polymer to allow us to actually use it to thicken our sludge on our gravity belt thickeners. Tests are done a various sludge loadings and polymer doses. This will tell us how much polymer is needed to obtain the thickened solids concentrations that we need. Using this data we specify how much polymer the vendor will need to supply and the vendor gives us a quotation based on that volume. The best polymer and the best dosage are highly dependent on the characteristics of the sludge. Because the sludge characteristics are constantly changing as we put various parts of the 11th Addition in service, we have not yet reached a stable, consistent sludge quality. We have worked with our current polymer supplier to find the best polymer that he has for each of our sludge thickening applications. The vendor has not increased the unit cost of the polymer since our contract ended. After we stabilize our operations, we will be able to go through the polymer bidding process. Defoamant – Over the last several years we have tried defoamant from several suppliers. The product we are currently using has been the most cost effective. As more of the 11th Addition processes are placed in service, we are hoping to reduce the need for defoamant. Again, when we have stabilized the digestion operation we will determine defoamant needs and investigate defoamant options. Sodium hydroxide – This chemical is used to control the pH within the Ostara reactors. We are in the process of determining how much sodium hydroxide we will need on an annual basis. We expect that we will receive a price break based on the volume of this chemical that we are using. Until we know that, we won’t be able to request quotations. It is expected that we will have this information by mid-summer. Ferric Chloride – It is expected that the recovery of phosphorus through the struvite harvesting system will reduce the amount of ferric chloride that we need to add to control struvite formation in pumps and piping. We again need to stabilize our struvite harvesting system so we can determine how much ferric chloride we need to

Authorizing Purchase of Chemicals Page 3 February 13, 2014

purchase on an annual basis. That will then allow suppliers to provide quotes. As with the polymer, the supplier has not raised the unit price since our contract ended.

Analysis and Options: Option 1: Authorize District staff to execute purchase orders for the chemicals at the level included in the 2014 budget. Key Considerations: This authorization will comply with the financial principles adopted by the Commission in 2013. It will also allow purchase of these critical chemicals to be made. Only the actual amount of chemicals needed with be purchased. When stability has been achieved in the digestion and struvite harvesting processes, requests for quotations will be developed. Option 2: Direct staff to request quotations for these chemicals at this time. Key Considerations: This option is not recommended. There is uncertainty about the quantity of each of these chemicals that will be needed. This does not allow bidders to know the quantity they must supply and will most likely result in higher prices.

Next Steps: If authorization is received, purchase orders will be created for the budgeted amounts for each of the chemicals. Payments will be made against these purchase orders during the year. When the digestion and struvite harvesting processes have been stabilized, requests for quotations will be made for these chemicals.

February 13, 2014 COMMISSION AGENDA REPORT

Overhaul of Gas Engine

Lead Staff: Paul Nehm

Requested Action: Move to approve the overhaul of a gas engine to Gas Drive Global for $166,766. Attachments: None

Financial Impact:

The 2014 budget contains $175,000 for overhaul of generator engine 2.

Background:

The District has three large Waukesha engines that use digester gas as fuel. Two of the engines power generators that create electric power for the plant. The other engine turns a blower which provides air to the aeration tanks on the east side of the plant. The engines require periodic major maintenance. Generator engine 2 has about 60,000 hours of run time since its last overhaul. Typically an overhaul is scheduled after 20,000 - 30,000 hours. By performing meticulous maintenance on the engines, the District’s maintenance section has been able to extend the time between required overhauls. Quotations were received from Gas Drive, International, the authorized service company for Waukesha engines, and Kraft Power Corporation, the previously authorized service company. Kraft Power performed the last overhaul we had done. Since that time Waukesha Engines was bought by General Electric. General Electric dropped Kraft Power as their authorized service company. Gas Drive and Kraft submitted the following quotations: Gas Drive Global $166,766 Kraft Power $149,112

Overhaul of Gas Engine Page 2 February 13, 2014

Although the quotation from Kraft Power was lower, it did not contain costs for all of the items required for overhaul. In addition where the Gas Drive quote included new components, the Kraft Power quote indicated that they intended to reuse many parts and would charge extra if they had to provide new parts. It was also learned that the mechanics who had worked for Kraft Power on the previous overhaul were no longer employed by Kraft Power. For these reasons, the District’s maintenance section is recommending that the overhaul be performed by Gas Drive Global. The engines are a critical component in moving the District to energy independence and need to be reliable.

Analysis and Options:

Option 1: Award the overhaul of generator engine 2 to Gas Drive Global This is the preferred option. Gas Drive Global is the manufacturer’s authorized service company. We are assured that we will receive certified Waukesha Engine parts by the company that General Electric has chosen to be its agent. The quote from this company is complete. Option 2: Award the overhaul of generator 2 to Kraft Power Corporation This option is not recommended. Although the quotation from Kraft Power is less than the bid from Gas Drive, several critical components are not included in the Kraft Power bid. We need to ensure that a proper overhaul is completed.

Next Steps:

If the overhaul by Gas Drive is approved, the mechanical maintenance section will remove the engine and ship it to Gas Drive’s maintenance facility in Wyoming. It is expected that the overhaul will take four weeks to complete.

February 13, 2014 COMMISSION AGENDA REPORT

Approval of Resolution Authorizing Promissory Notes for CWF Loan for Pumping Station 18

Lead Staff: Jeff Brochtrup, Director of Administration

Requested Action: Adopt the resolution authorizing the issuance and sale of up to $12,362,184 General Obligation Sewerage System Promissory Notes for the Clean Water Fund (CWF) Loan for the Pumping Station 18 Force Main project. Attachments: Attachment – Resolution 1

Financial Impact:

The adoption of the resolution commits the District to finance up to $12,362,184 of the project costs via a CWF loan. The interest rate on the loan would be 2.716%. Interest payments on the loan would begin on May 1, 2014 and are then due every May 1st and November 1st

. Annual principal payments on the loan would begin May 1, 2015. The final principal and interest payment would be due on May 1, 2033. The maximum annual principal and interest payment would be no more than $834,633 if the District uses the full amount of the loan.

Background:

The District’s 2014 Capital Projects Budget and Capital Improvements Plan (CIP) anticipated funding this project with a Clean Water Fund Loan. The District’s bond counsel, Thomas Griggs of Griggs Law Office, LLC, has prepared the resolution and related documents and has reviewed the Financial Assistance Agreement.

Approval of Promissory Note Resolution Page 2 February 13, 2014

Analysis and Options: CWF financing for the project is part of the District’s capital improvements plan. Failure to obtain financing for the project would leave us with inadequate funds to continue the project. The District has awarded a construction contract to S. J. Louis Construction, Inc. and construction is currently underway. Option 1: Adopt the Note Resolution and proceed with CWF financing for the project. Staff recommends this option. Key Considerations:

• The CWF is the low cost source of 20-year debt financing for the District. • Adopting the Note Resolution will allow for a loan closing on February 26, 2014 at which

time the District expects to receive a payment of $1.8 million. This payment will reimburse the District for planning, design, and construction costs to date for the project.

• Adopting the Note Resolution levies a property tax which the District abates by collecting the required debt service funds via service charges the year before the payments are due.

Option 2: Pursue competitive market bond financing for the project. Key Considerations:

• Competitive market bond rates for a 20-year term are moving back to historical levels and are higher than the CWF loan rate for this project.

• Obtaining competitive market bonds would delay receipt of the loan proceeds and put a strain on available District cash to fund other capital projects.

Next Steps: After adoption of the note resolution, we will proceed with the work needed to close the loan on February 26.

RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF UP TO $12,362,184 GENERAL OBLIGATION

SEWERAGE SYSTEM PROMISSORY NOTES, SERIES 2014A AND PROVIDING FOR OTHER

DETAILS AND COVENANTS WITH RESPECT THERETO

WHEREAS, the Madison Metropolitan Sewerage District, Dane County, Wisconsin (the "Municipality") owns and operates a sewerage system (the "System") which is operated for a public purpose as a public utility by the Municipality; and

WHEREAS, certain improvements to the System are necessary to meet the needs of the Municipality and the residents thereof, consisting of the construction of a project (the "Project") assigned Clean Water Fund Program Project No. 4010-43 by the State of Wisconsin Department of Natural Resources (the "Department of Natural Resources"), and as defined in the Department of Natural Resources approval letter for the Plans and Specifications of the Project, or portions thereof, issued under Section 281.41 of the Wisconsin Statutes, and assigned No. S-2013-0367 dated September 5, 2013; and

WHEREAS, under the provisions of Chapter 67.12(12) of the Wisconsin Statutes, any Municipality (as defined in Section 67.01(5) of the Statutes) may, by action of its governing body, provide for the acquisition, planning, design, construction, development, extension, enlargement, renovation, rebuilding, repair or improvement of land, water, properties, buildings, equipment or facilities from the proceeds of promissory notes which are general obligations of the Municipality; and

WHEREAS, the Municipality deems it to be necessary, desirable and in its best interest to authorize and sell general obligation sewerage system promissory notes of the Municipality pursuant to the provisions of Section 67.12(12) of the Wisconsin Statutes, to pay the cost of the Project; and

WHEREAS, other than "preliminary expenditures" as defined in Treas. Reg. 26 CFR 1.150-2 in an amount not exceeding 20% of the principal amount of the notes authorized to be issued by this resolution, or other than a "de minimis" amount as defined in Treas. Reg. 26 CFR 1.150-2 in an amount not exceeding the lesser of $100,000 or 5% of the principal amount of the notes authorized to be issued by this resolution, all of the proceeds loaned to the Municipality will be used for Project costs paid by the Municipality subsequent to (i) the date which is 60 days prior to the date on which the Municipality adopted a "declaration of intent" pursuant to Treas. Reg. 26 CFR 1.150-2 stating its intent to reimburse other funds of the Municipality previously used to finance the Project, or (ii) the date on which the notes authorized herein are issued; and

WHEREAS, the Municipality currently has general obligation debt outstanding in the aggregate principal amount of $131,603,051.00 as follows:

2

Bond Issue Date of Issue Original Principal

Amount Principal Amount

Outstanding

1994 Sewerage System Improvement Bonds 11/22/94 $ 1,200,000.00 $ 83,013.49

1995 Sewerage System Improvement Bonds 10/11/95 2,753,289.00 367,016.81 1996 Sewerage System Improvement Bonds 02/28/96 15,974,780.00 2,130,062.97 1997 Sewerage System Improvement Bonds 06/11/97 4,992,406.00 1,224,258.04 2000 Sewerage System Improvement Bonds 11/22/00 1,886,671.00 786,010.13 2001 Sewerage System Improvement Bonds 05/09/01 2,190,640.00 980,880.13 2003A Sewerage System Promissory Notes 07/23/03 7,674,449.00 4,552,036.25 2003B Sewerage System Promissory Notes 08/27/03 35,427,273.00 22,046,930.32 2005A Sewerage System Promissory Notes 10/12/05 332,145.00 186,602.40 2006A Sewerage System Promissory Notes 09/13/06 1,892,491.00 1,216,154.16 2007A Sewerage System Promissory Notes 12/12/07 2,826,309.00 2,052,570.82 2008A Sewerage System Promissory Notes 11/12/08 9,143,490.00 7,238,617.90 2010A Sewerage System Promissory Notes 05/26/10 8,964,767.00 7,807,622.98 2012A Sewerage System Promissory Notes 02/22/12 50,362,380.00 50,362,380.00* 2012B Sewerage System Promissory Notes 05/23/12 2,955,949.00 2,857,427.60 2013A Sewerage System Promissory Notes 05/08/13 8,191,338.00 8,191,338.00** 2013B Sewerage System Promissory Notes 09/25/13 14,773,549.00 14,773,549.00*** 2013C Sewerage System Promissory Notes 11/27/13 4,746,580.00 4,746,580.00**** Total $176,288,506.00 $131,603,051.00

* As of February 1, 2014 $44,674,469.67 has been drawn against the authorized amount. ** As of February 1, 2014 $7,749,268.32 has been drawn against the authorized amount. *** As of February 1, 2014 $3,350,315.87 has been drawn against the authorized amount. **** As of February 1, 2014 $2,901,894.58 has been drawn against the authorized amount. NOW, THEREFORE, be it resolved by the Governing Body of the Municipality that:

Section 1. Definitions. The following terms shall have the following meanings in this Resolution unless the text expressly or by implication requires otherwise:

(a) "Act" means Chapter 67 of the Wisconsin Statutes;

(b) "Closing Date" means the date of closing on the Clean Water Fund Program loan when the Notes are delivered to the State pursuant to the Financial Assistance Agreement;

(c) "Debt Service Fund" means the Debt Service Fund of the Municipality, created by this resolution, pursuant to Section 67.11 of the Act;

(d) "Financial Assistance Agreement" means the Financial Assistance Agreement by and between the Municipality and the State of Wisconsin by the Department of Natural Resources and the Department of Administration pursuant to which the Notes are to be issued and sold to the State, dated as of the Closing Date, substantially in the form attached hereto and incorporated herein by reference;

(e) "Fiscal Year" means the twelve-month period ending on each December 31;

(f) "Governing Body" means the Madison Metropolitan Sewerage District Commission, or such other body as may hereafter be the chief legislative body of the Municipality;

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(g) "Municipal Treasurer" means the Treasurer of the Municipality, who shall act as Note Registrar and Paying Agent;

(h) "Municipality" means Madison Metropolitan Sewerage District;

(i) "Notes" mean the $12,362,184 General Obligation Sewerage System Promissory Notes, Series 2014A of the Municipality dated as of the Closing Date, authorized to be issued by this Resolution;

(j) "Note Registrar" means the Municipal Treasurer who shall act as Paying Agent for the Notes;

(k) "Note Year" means the twelve-month period ending on each May 1;

(l) "Project" means the Project described in the preamble to this Resolution. All elements of the Project are to be owned and operated by the Municipality as part of the System as described in the Financial Assistance Agreement;

(m) "Record Date" means the close of business on the fifteenth day of the calendar month next preceding any principal or interest payment date; and

(n) "System" means the entire sewerage system of the Municipality, specifically including that portion of the Project owned by the Municipality and including all property of every nature now or hereafter owned by the Municipality for the collection, transmission, treatment and disposal of domestic and industrial sewerage and waste, including all improvements and extensions thereto made by the Municipality while any of the Notes remain outstanding, including all real and personal property of every nature comprising part of or used or useful in connection with such sewerage system and including all appurtenances, contracts, leases, franchises, and other intangibles.

Section 2. Authorization of the Notes and the Financial Assistance Agreement. For the purpose of paying the cost of the Project (including legal, fiscal, engineering and other expenses), there shall be borrowed on the full faith and credit of the Municipality up to the sum of $12,362,184; and fully registered general obligation sewerage system promissory notes of the Municipality are authorized to be issued in evidence thereof and sold to the State of Wisconsin Clean Water Fund Program in accordance with the terms and conditions of the Financial Assistance Agreement, which is incorporated herein by this reference; and the President (or in his/her absence, the Vice President) and the Secretary (or in his/her absence, the Vice President) of the Municipality are hereby authorized, by and on behalf of the Municipality, to execute the Financial Assistance Agreement.

Section 3. Terms of the Notes. The Notes shall be designated "General Obligation Sewerage System Promissory Notes, Series 2014A" (the "Notes"); shall be dated as of the Closing Date; shall be numbered one and upward; shall bear interest at 2.716% per annum, calculated on the basis of a 360-day year made up of twelve 30-day months; shall be issued in denominations of $0.01 or any integral multiple thereof; and shall mature on the dates and in the amounts as set forth in Exhibit B of the Financial Assistance Agreement as it is from time to time adjusted by the State based upon actual draws made by the Municipality. Interest on the Notes shall be payable

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semiannually on May 1 and November 1 of each year, commencing on May 1, 2014. The Notes shall not be subject to redemption prior to maturity except as provided in the Financial Assistance Agreement.

Section 4. Form, Execution, Registration and Payment of the Notes. The Notes shall be issued as registered obligations in substantially the form attached hereto as Exhibit A and incorporated herein by this reference.

The Notes shall be executed in the name of the Municipality by the manual signatures of the President (or in his/her absence, the Vice President) and the Secretary (or in his/her absence, the Vice President, as Acting Secretary), and shall be sealed with its official or corporate seal, if any.

The principal of, premium, if any, and interest on the Notes shall be paid by the Municipal Treasurer, who is hereby appointed as the Municipality's registrar (the "Note Registrar").

Both the principal of and interest on the Notes shall be payable in lawful money of the United States of America by the Note Registrar. Payment of principal of the final maturity on the Note will be payable upon presentation and surrender of the Note to the Note Registrar. Payment of principal on the Note (except the final maturity) and each installment of interest shall be made to the registered owner of each Note who shall appear on the registration books of the Municipality, maintained by the Note Registrar, on the Record Date and shall be paid by electronic transfer or by check or draft of the Municipality and mailed to such registered owner at his or its address as appears on such registration books or at such other address as may be furnished in writing by such registered owner to the Note Registrar.

Section 5. Note Proceeds. The sale proceeds of the Notes (exclusive of accrued interest and any premium received) shall, forthwith upon receipt, be placed in and kept by the Treasurer as a separate account of the Municipal Capital Projects Fund to be known as the "General Obligation Sewerage System Promissory Notes, Series 2014A, Borrowed Money Account" (hereinafter referred to as the "Borrowed Money Fund", which shall be the “borrowed money fund” as such term is defined in the Act). Monies in the "Borrowed Money Fund" shall be used solely for the purposes for which borrowed or for transfer to the Debt Service Fund as provided by law.

Section 6. Tax Levy.

(a) For the express purpose of paying the interest on the Notes as it falls due and also to pay and discharge the principal thereof at maturity, there is hereby levied upon all of the taxable property in the Municipality, in addition to all other taxes, a non-repealable, direct, annual tax in an amount sufficient for that purpose. This tax shall be for collection in the years 2015 through 2033, inclusive, and shall be in such amounts as are necessary to provide for the payment of the principal and interest on the Notes when due. This tax, based on an interest rate of 2.716%, shall be in the maximum amounts as set forth in Exhibit B to the Financial Assistance Agreement, or such lesser amounts as it is from time-to-time adjusted by the State based upon actual draws made by the Municipality. Said Exhibit B is attached hereto as Exhibit B.

The actual tax carried onto the tax rolls each year shall equal the amount necessary to repay the actual principal amount drawn under the Notes, and any interest thereon, when due. The

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amount of tax carried into the tax roll may be reduced in any year by the amount of revenues of the Municipality's wastewater sewer service charge system which are appropriated and irrevocably deposited in the Debt Service Fund for the Notes.

(b) The Municipality shall be and continue without power to repeal such levy or obstruct the collection of said tax until all such payments have been made or provided for. After the issuance of the Notes, said tax shall be, from year to year, carried into the tax rolls of the Municipality and collected as other taxes are collected, provided that the amount of tax carried into said tax rolls may be reduced in any year by the amount of any surplus money in the Debt Service Fund created in Section 7 hereof.

(c) If at any time there shall be on hand insufficient funds from the aforesaid tax levy to meet principal and/or interest payments on said Notes when due, the requisite amounts shall be paid from other funds of the Municipality then available, which sums shall be replaced upon the collection of the taxes herein levied.

Section 7. Debt Service Fund. The proceeds of the taxes levied pursuant to Section 6 above, when collected by the Municipal Treasurer, shall be placed and kept by the Municipal Treasurer as a separate fund irrevocably pledged for paying the principal of and interest on the Notes so long as any such Notes shall remain outstanding, to be known as the General Obligation Sewerage System Promissory Notes, Series 2014A, Debt Service Fund (hereinafter referred to as "Debt Service Fund"). The accrued interest and any premium received at the time of delivery of the Notes shall be paid over to the Debt Service Fund. Interest on or principal of the Notes falling due at any time when there shall be on hand in the Debt Service Fund insufficient funds for the payment of such principal and interest shall be paid promptly when due from other funds of the Municipality.

Section 8. Deposits and Investments. The Debt Service Fund shall be kept apart from monies in the other funds and accounts of the Municipality and the same shall be used for no purpose other than the prompt payment of principal of and interest on the Notes as the same becomes due and payable. All monies therein shall be deposited in special and segregated accounts in a public depository selected under Chapter 34 of the Wisconsin Statutes and may be temporarily invested until needed in legal investments subject to the provisions of Section 66.0603 and 67.10(3) of the Wisconsin Statutes. All income derived from such investments shall be regarded as revenues of the Municipality. No such investment shall be in such a manner as would cause the Notes to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or the Regulations of the Commissioner of Internal Revenue thereunder.

An officer of the Municipality shall, on the basis of the facts, estimates and circumstances in existence on the date of closing, make such certifications as are necessary to permit the conclusion that the Notes are not "arbitrage bonds" under Section 148 of the Internal Revenue Code of 1986, as amended, or the Regulations of the Commissioner of Internal Revenue thereunder.

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Section 9. Operation of System; Municipality Covenants. It is covenanted and agreed by the Municipality with the owner or owners of the Notes, and each of them, that the Municipality will perform all of the obligations as set forth in the Financial Assistance Agreement.

Section 10. Sale of Notes. The sale of Notes to the State of Wisconsin Clean Water Fund Program for the purchase price of up to $12,362,184, at par, is ratified and confirmed; and the officers of the Municipality are authorized and directed to do any and all acts, including executing the Financial Assistance Agreement and the Notes as hereinabove provided, necessary to conclude delivery of the Notes to said purchaser, as soon after adoption of this Resolution as is convenient. The purchase price for the Notes shall be paid upon requisition therefor as provided in the Financial Assistance Agreement.

Section 11. Application of Note Proceeds. The proceeds of the sale of the Notes shall be deposited by the Municipality into the "Borrowed Money Fund". The Borrowed Money Fund shall be used solely for the purpose of paying the costs of the Project (including capitalized interest, if any, on the Notes) as more fully described in the preamble hereof and in the Financial Assistance Agreement. Moneys in the Borrowed Money Fund shall be disbursed within three (3) business days of their receipt from the State of Wisconsin and shall not be invested in any interest-bearing account.

Section 12. Amendment to Resolution. After the issuance of any of the Notes, no change or alteration of any kind in the provisions of this Resolution may be made until all of the Notes have been paid in full as to both principal and interest, or discharged as herein provided, except: (a) the Municipality may, from to time, amend this Resolution without the consent of any of the owners of the Notes, but only to cure any ambiguity, administrative conflict, formal defect, or omission or procedural inconsistency of this Resolution; and (b) this Resolution may be amended, in any respect, with a written consent of the owners of not less than two-thirds (2/3) of the principal amount of the Notes then outstanding, exclusive of Notes held by the Municipality; provided, however, that no amendment shall permit any change in the pledge of tax revenues of the Municipality or the maturity of any Note issued hereunder, or a reduction in the rate of interest on any Note, or in the amount of the principal obligation thereof, or in the amount of the redemption premium payable in the case of redemption thereof, or change the terms upon which the Notes may be redeemed or make any other modification in the terms of the payment of such principal or interest without the written consent of the owner of each such Note to which the change is applicable.

Section 13. Defeasance. When all Notes have been discharged, all pledges, covenants and other rights granted to the owners thereof by this Resolution shall cease. The Municipality may discharge all Notes due on any date by irrevocably depositing in escrow with a suitable bank or trust company a sum of cash and/or bonds or securities issued or guaranteed as to principal and interest by the U.S. Government, or by a commission, board or other instrumentality of the U.S. Government, maturing on the dates and bearing interest at the rates required to provide funds sufficient to pay when due the interest to accrue on each of said Notes to its maturity or, at the Municipality's option, if said Note is prepayable to any prior date upon which it may be called for redemption, and to pay and redeem the principal amount of each such Note at maturity, or at the Municipality's option, if said Note is prepayable, at its earliest redemption date, with the premium

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required for such redemption, if any, provided that notice of the redemption of all prepayable Notes on such date has been duly given or provided for.

Section 14. Rebate Fund. Unless the Notes are exempt from the rebate requirements of the Internal Revenue Code of 1986, as amended, the Municipality shall establish and maintain a separate account for the Notes to be known as the “Rebate Fund”. The sole purpose of the Rebate Fund is to provide for the payment of any rebate liability with respect to the Notes under the relevant provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder (the “Regulations”). The Rebate Fund shall be maintained by the Municipality until all required rebate payments with respect to the Notes have been made in accordance with the relevant provisions of the Code and the Regulations.

The Municipality hereby covenants and agrees that it shall pay to the United States from the Rebate Fund, at the times and in the amounts and manner required by the Code and the Regulations, the portion of the “rebate amount” (as defined in Section 1.148-3(b) of the Regulations) that is due as of each “computation date” (within the meaning of Section 1.148-3(e) of the Regulations). As of the date of this Resolution, the provisions of the Regulations specifying the required amounts of rebate installment payments and the time and manner of such payments are contained in Sections 1.148-3(f) and (g) of the Regulations, respectively. Amounts held in the Rebate Fund and the investment income therefrom are not pledged as security for the Notes and may only be used for the payment of any rebate liability with respect to the Notes.

The Municipality may engage the services of accountants, attorneys or other consultants necessary to assist it in determining the rebate payments, if any, owed to the Unites States with respect to the Notes. The Municipality shall maintain or cause to be maintained records of determinations of rebate liability with respect to the Notes for each computation date until six (6) years after the retirement of the last of the Notes. The Municipality shall make such records available to the State of Wisconsin upon reasonable request therefor.

Section 15. Continuing Disclosure. The officers of the Municipality are hereby authorized and directed, if requested by the State, to provide to the State of Wisconsin Clean Water Fund Program (the “CWFP”) and to such other persons or entities as directed by the CWFP such ongoing disclosure regarding the Municipality's financial condition and other matters, at such times and in such manner as the CWFP may require, in order that securities issued by the Municipality and the CWFP satisfy rules and regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended or may be amended from time to time imposed on brokers and dealers of municipal securities before the brokers and dealers may buy, sell, or recommend the purchase of such securities.

Section 16. Resolution a Contract. The provisions of this Resolution shall constitute a contract between the Municipality and the owner or owners of the Notes, and after issuance of any of the Notes no change or alteration of any kind in the provisions of this Resolution may be made, except as provided in Section 12, until all of the Notes have been paid in full as to both principal and interest. The owner or owners of any of the Notes shall have the right in addition to all other rights, by mandamus or other suit or action in any court of competent jurisdiction, to enforce such owner's or owners' rights against the Municipality, the Governing Body thereof, and any and all officers and agents thereof including, but without limitation, the right to require the Municipality,

8

its Governing Body and any other authorized body, to take any and all actions necessary to carry out all of the provisions and agreements contained in this Resolution.

Section 17. Requirements of Municipality. The officers of the Municipality, staff of the Municipality, attorneys for the Municipality, financial consultants of the Municipality, or other agents or employees of the Municipality are hereby authorized to do all acts and things required of them by this Resolution for the full, punctual and complete performance of all of the provisions of this Resolution.

Section 18. Illegal or Invalid Provisions. In case any one or more of the provisions of this Resolution or any of the Notes shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Resolution or of the Notes.

Section 19. Conflicting Resolutions. All ordinances, resolutions, or orders, or parts thereof heretofore enacted, adopted or entered, in conflict with the provisions of this Resolution, are hereby repealed, and this Resolution shall be in effect from and after its passage.

Passed: February 13, 2014

Approved: February 13, 2014

____________________________ Caryl E. Terrell, President

Attest: ______________________________ Ezra J. Meyer, Secretary

EXHIBIT A (Form of Note)

REGISTERED UNITED STATES OF AMERICA REGISTEREDNO. R-1 STATE OF WISCONSIN $12,362,184 COUNTY OF DANE MADISON METROPOLITAN SEWERAGE DISTRICT

GENERAL OBLIGATION SEWERAGE SYSTEM PROMISSORY NOTE, SERIES 2014A

Final Maturity Date

Date of Original Issue

May 1, 2033 February 26, 2014

REGISTERED OWNER: STATE OF WISCONSIN CLEAN WATER FUND PROGRAM

KNOW ALL MEN BY THESE PRESENTS that the Madison Metropolitan Sewerage District, Dane County, Wisconsin, (the "Municipality") hereby acknowledges itself to owe and for value received promises to pay to the registered owner shown above, or registered assigns, solely from the fund hereinafter specified, the principal sum of an amount not to exceed TWELVE MILLION THREE HUNDRED SIXTY-TWO THOUSAND ONE HUNDRED EIGHTY-FOUR DOLLARS ($12,362,184) (but only so much as shall have been drawn hereunder, as provided below) on May 1 of each year commencing May 1, 2015 until the final maturity date written above, together with interest thereon (but only on amounts as shall have been drawn hereunder, as provided below) from the dates the amounts are drawn hereunder or the most recent payment date to which interest has been paid, at the rate of 2.716% per annum, calculated on the basis of a 360-day year made up of twelve 30-day months, such interest being payable on the first days of May and November of each year, with the first interest being payable on May 1, 2014.

The principal amount evidenced by this Note may be drawn upon by the Municipality in accordance with the Financial Assistance Agreement entered by and between the Municipality and the State of Wisconsin by the Department of Natural Resources and the Department of Administration including capitalized interest transferred (if any). The principal amounts so drawn shall be repaid in installments on May 1 of each year commencing on May 1, 2015 in an amount equal to an amount which when amortized over the remaining term of this Note plus current payments of interest (but only on amounts drawn hereunder) at Two and Seven Hundred Sixteen Thousandths percent (2.716%) per annum shall result in equal annual payments of the total of principal and the semiannual payments of interest. The State of Wisconsin Department of Administration shall record such draws and corresponding principal repayment schedule on a cumulative basis in the format shown on the attached Exhibit A.

Both principal and interest hereon are hereby made payable to the registered owner in lawful money of the United States of America. On the final maturity date, principal of this Note shall be payable only upon presentation and surrender of this Note at the office of the Municipal Treasurer. Principal hereof (except the final maturity) and interest hereon shall be payable by

2

electronic transfer or by check or draft dated on or before the applicable payment date and mailed from the office of the Municipal Treasurer to the person in whose name this Note is registered at the close of business on the fifteenth day of the calendar month next preceding such interest payment date.

The Notes shall not be redeemable prior to their maturity, except with the consent of the registered owner.

This Note is transferable only upon the books of the Municipality kept for that purpose at the office of the Municipal Treasurer, by the registered owner in person or its duly authorized attorney, upon surrender of this Note, together with a written instrument of transfer (which may be endorsed hereon) satisfactory to the Municipal Treasurer, duly executed by the registered owner or its duly authorized attorney. Thereupon a replacement Note shall be issued to the transferee in exchange therefor. The Municipality may deem and treat the person in whose name this Note is registered as the absolute owner hereof for the purpose of receiving payment of or on account of the principal or interest hereof and for all other purposes. This Note is issuable solely as a negotiable, fully-registered note, without coupons, and in denominations of $0.01 or any integral multiple thereof.

This Note is issued for the purpose of providing for the payment of the cost of constructing improvements to the Sewerage System of the Municipality, pursuant to Article XI, Section 3 of the Wisconsin Constitution, Chapter 67, Wisconsin Statutes, and a resolution adopted on February 13, 2014, and entitled: "RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF UP TO $12,362,184 GENERAL OBLIGATION SEWERAGE SYSTEM PROMISSORY NOTES, SERIES 2014A AND PROVIDING FOR OTHER DETAILS AND COVENANTS WITH RESPECT THERETO." The principal of and interest on this Note is payable in lawful money of the United States of America as aforesaid, and for the prompt payment of the principal and interest on this Note, and for the levy of taxes sufficient for that purpose, the full faith, credit and resources of the Municipality are hereby irrevocably pledged.

It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this Note have existed, have happened, and have been performed in due time, form and manner as required by law; that the indebtedness of the Municipality, including this Note and the issue of which it is a part, does not exceed any limitation, general or special, imposed by law; and that a valid, direct, annual irrepealable tax has been levied by the Municipality sufficient to pay the interest on this Note when it falls due and also to pay and discharge the principal hereof at maturity.

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IN WITNESS WHEREOF, the Municipality has caused this Note to be signed by the signatures of its President (or in his/her absence, the Vice President) and Secretary (or in his/her absence, the Vice President, as Acting Secretary), and its corporate seal (or a true facsimile thereof) to be impressed (or imprinted) hereon, all as of the date of original issue specified above.

MADISON METROPOLITAN SEWERAGE DISTRICT DANE COUNTY, WISCONSIN

(SEAL) By: FORM OF NOTE Caryl E. Terrell, President By: FORM OF NOTE Ezra J. Meyer, Secretary

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(Form of Assignment)

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________.

(Please print or typewrite name and address, including zip code, of Assignee)

Please insert Social Security or other identifying number of Assignee _____________________________________ the within Note, and all rights thereunder, hereby irrevocably constituting and appointing _________________________________________________________________ Attorney to transfer said Note on the books kept for the registration thereof with full power of substitution in the premises.

Dated: _____________________

__________________________________________ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever.

Signature(s) guaranteed by: ___________________________________

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EXHIBIT A TO NOTE

$12,362,184 MADISON METROPOLITAN SEWERAGE DISTRICT

DANE COUNTY, WISCONSIN GENERAL OBLIGATION SEWERAGE SYSTEM

PROMISSORY NOTES, SERIES 2014A

Amount of Date of Series of Principal Principal Disbursement Disbursement Bonds Repaid Balance

$__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________ $__________ __________ _____ $__________ $__________

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EXHIBIT A TO NOTE (continued)

PRINCIPAL REPAYMENT SCHEDULE

Date Principal Amount

May 1, 2015 $505,743.94 May 1, 2016 519,479.95 May 1, 2017 533,589.03 May 1, 2018 548,081.30 May 1, 2019 562,967.19 May 1, 2020 578,257.38 May 1, 2021 593,962.85 May 1, 2022 610,094.88 May 1, 2023 626,665.06 May 1, 2024 643,685.28 May 1, 2025 661,167.78 May 1, 2026 679,125.09 May 1, 2027 697,570.13 May 1, 2028 716,516.13 May 1, 2029 735,976.71 May 1, 2030 755,965.84 May1, 2031 776,497.87 May 1, 2032 797,587.56 May 1, 2033 819,250.03

Madison Metropolitan Sewerage District Exhibit BProject 4010-43 Clean Water Fund ProgramLoan Closing Date: February 26, 2014

Payment Principal Interest Interest Principal & Bond Year Calendar YearDate Payment Rate Payment Interest Debt Service Debt Service

1-May-14 2.716% 60,622.78 60,622.78 60,622.781-Nov-14 2.716% 167,878.46 167,878.46 228,501.241-May-15 505,743.94 2.716% 167,878.46 673,622.40 841,500.861-Nov-15 2.716% 161,010.46 161,010.46 834,632.861-May-16 519,479.95 2.716% 161,010.46 680,490.41 841,500.871-Nov-16 2.716% 153,955.92 153,955.92 834,446.331-May-17 533,589.03 2.716% 153,955.92 687,544.95 841,500.871-Nov-17 2.716% 146,709.78 146,709.78 834,254.731-May-18 548,081.30 2.716% 146,709.78 694,791.08 841,500.861-Nov-18 2.716% 139,266.84 139,266.84 834,057.921-May-19 562,967.19 2.716% 139,266.84 702,234.03 841,500.871-Nov-19 2.716% 131,621.74 131,621.74 833,855.771-May-20 578,257.38 2.716% 131,621.74 709,879.12 841,500.861-Nov-20 2.716% 123,769.01 123,769.01 833,648.131-May-21 593,962.85 2.716% 123,769.01 717,731.86 841,500.871-Nov-21 2.716% 115,702.99 115,702.99 833,434.851-May-22 610,094.88 2.716% 115,702.99 725,797.87 841,500.861-Nov-22 2.716% 107,417.90 107,417.90 833,215.771-May-23 626,665.06 2.716% 107,417.90 734,082.96 841,500.861-Nov-23 2.716% 98,907.79 98,907.79 832,990.751-May-24 643,685.28 2.716% 98,907.79 742,593.07 841,500.861-Nov-24 2.716% 90,166.54 90,166.54 832,759.611-May-25 661,167.78 2.716% 90,166.54 751,334.32 841,500.861-Nov-25 2.716% 81,187.89 81,187.89 832,522.211-May-26 679,125.09 2.716% 81,187.89 760,312.98 841,500.871-Nov-26 2.716% 71,965.37 71,965.37 832,278.351-May-27 697,570.13 2.716% 71,965.37 769,535.50 841,500.871-Nov-27 2.716% 62,492.36 62,492.36 832,027.861-May-28 716,516.13 2.716% 62,492.36 779,008.49 841,500.851-Nov-28 2.716% 52,762.08 52,762.08 831,770.571-May-29 735,976.71 2.716% 52,762.08 788,738.79 841,500.871-Nov-29 2.716% 42,767.51 42,767.51 831,506.301-May-30 755,965.84 2.716% 42,767.51 798,733.35 841,500.861-Nov-30 2.716% 32,501.50 32,501.50 831,234.851-May-31 776,497.87 2.716% 32,501.50 808,999.37 841,500.871-Nov-31 2.716% 21,956.65 21,956.65 830,956.021-May-32 797,587.56 2.716% 21,956.65 819,544.21 841,500.861-Nov-32 2.716% 11,125.42 11,125.42 830,669.631-May-33 819,250.03 2.716% 11,125.42 830,375.45 841,500.87 830,375.45

Totals 12,362,184.00 3,686,955.20 16,049,139.20 16,049,139.20 16,049,139.20

Net Interest Rate 2.7160%Bond Years 135,749.4589

Average Life 10.9810

The above schedule assumes full disbursement of the loan on the loan closing date.13-Jan-14 Wisconsin Department of Administration

B - 1

2/13/2014

Commission Meeting

Cash Statements

Review and Approval of DARC Contract Amount and Time

Extension-Dunn

Authorizing Purchase of Chemicals-Nehm

Authorizing Overhaul of Gas Engine-Nehm

Review and Adoption of Resolution Authorizing The

Issuance And Sale of up to $12,362,184 General Obligation

Sewerage System Promissory Notes, Series 2014A and

Providing for Other Details With Respect Thereto for the

Pump Station 18 Force Main Project-Brochtrup

2/27/2014 Commission Meeting & Study Session

Review and Approval of Sewer Extension Plans-Post

2/27/2014 STUDY SESSION

3/13/2014 Commission Meeting

Cash Statements

Review and Approval of Sewer Extension Plans-Sauser



Tentative: CliftonLarsonAllen LLP Discussion of 2013

Audited Financial Statements-Fox



Cash Statements


Approval of 1st Quarter 2014 Sewer Service Bills-Gebert

4/24/2014 Review and Approval of Sewer Extension Plans-Sauser



Cash Statements including Debt Service Funds





6/12/2014 Commission Cash Statements

Note: All dates are tentative and subject to change Upcoming Agenda Items (Note: routine business is shown in smaller font)

Subject: Calendar Date: February 10, 2014

– 2 –

Meeting Review and Approval of Sewer Extension Plans-Sauser



Tentative: Review and Approval of CMAR-Allen

Capital Improvement Plan-Review and Approval-Simon



Cash Statements


Approval of 2nd Quarter 2014 Sewer Service Bills-Gebert



Tentative: 2015 Budget Preparation



Cash Statements






Cash Statements


Preliminary Budget Presentation-Mucha



Public Hearing and Budget Discussion-Mucha



Cash Statements


Follow-up Discussion on the Preliminary Budget-Mucha

Approval of 3rd Quarter 2014 Sewer Service Charges-Gebert



Review and Adoption of the Updated 2015 Preliminary

Budget-Mucha

Review and Adoption of Proposed 2015 Sewer Service

Charge Rates and Septage Disposal Rates-Brochtrup

Review and Adoption of Proposed 2015 Application

Fees for Wastewater Generated Outside the District-

Taylor



Cash Statements including Debt Service Fund


Subject: Calendar Date: February 10, 2014

– 3 –

1st Meeting of the month Cash statement (Debt Service Fund information

included in May and November)

Capital Budget Update

All Meetings Sewer extensions and voids as necessary

Annexation Hearings as required

Policy Issue Discussions as necessary

Interim Financial Resolutions (as needed and

typically in January)

2nd Meeting of the month Operations Reports

Miscellaneous Topics: CWF Bonds (as needed)-Municipal Obligation &

Financial Assistance Agreement-part of CWF Bond

Annexations as needed

Sewer Use Ordinance (as needed)

Award Contracts & Project Closeouts (as needed)

Automatic Annexations-please check with Curt Sauser

Future Agenda Topic Future Discussion on Policy Regarding

Delinquent Sewer Extension Charges

Treatment Plant Connection Charges-Excess Capacity Charges-Commission Request

Dane County Manure Digester-Commission

Request

Commission & Staff Discussion

Review and Adoption of Proposed 2015 Interceptor

Connection Charge Rates and Treatment Plant

Connection Charge Rates-Sauser

Review and Adoption of the Proposed 2015 Annexation

Hearing Charges and Plan Review Fees-Borelli

11/26/2014 Wednesday Meeting

Commission Meeting & Study Session




Cash Statements



Documents

NOTICE OF REGULAR MEETING · NOTICE OF REGULAR MEETING PLEASE TAKE NOTICE that there will be a regular meeting of the Commission of the Madison Metropolitan Sewerage District at 8:00